Globally, colorectal cancer (CRC) is the third most prevalent cancer and the second leading cause of cancer-related deaths. Circular RNAs (circRNAs) are single-stranded RNA with covalently closed-loop structures and are highly stable, conserved, and abundantly expressed in various organs and tissues. Recent research found abnormal circRNA expression in CRC patients’ blood/serum, cells, CRC tissues, and exosomes. Furthermore, mounting data demonstrated that circRNAs are crucial to the development of CRC. CircRNAs have been shown to exert biological functions by acting as microRNA sponges, RNA-binding protein sponges, regulators of gene splicing and transcription, and protein/peptide translators. These characteristics make circRNAs potential markers for CRC diagnosis and prognosis, potential therapeutic targets, and circRNA-based therapies. However, further studies are still necessary to improve the understanding of the roles and biological mechanisms of circRNAs in the development of CRC. In this review, up-to-date research on the role of circRNAs in CRC was examined, focusing on their potential application in CRC diagnosis and targeted therapy, which would advance the knowledge of the functions of circRNAs in the development and progression of CRC.